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Motilal Oswal Report
Hero MotoCorp Ltd.'s performance was driven by higher realisation and efficient cost management, despite high cost of inflation.
While cost inflation is being managed reasonably well, demand recovery is the missing link in the story.
Q2 FY22 revenue/Ebitda/profit after tax declined 10%/17%/17% YoY (up 54%/up 107%/up 117% QoQ) to Rs 84.5 billion/Rs 10.7 billion/Rs 7.9 billion.
H1 FY22 revenues/Ebitda/profit after tax grew 13%/13%/14% YoY.
Volumes declined 20% YoY (up 40% QoQ). Realisations improved 14% YoY (10% QoQ) to Rs 58,800 (versus estimate Rs 55,400), led by price hikes, higher spare sales, and other operating income.
Vehicle average selling prices improved 2.6% QoQ.
We lower our FY22E/FY23E earnings per share estimates of Hero MotoCorp by 2%/4.5% on lower volumes.
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